At a recent team meeting, a mortgage lender brought up an issue regarding using a
bank versus a mortgage company when purchasing a property. This topic lit a light bulb, hence, today's blog.
Since I work with alot of short sales, I am asked the following two questions often:
Who is the lienholder and will the process get quicker if I use the lienholder for my loan? The answer to the second question is NO. The lienholder (the bank associated with the sellers note) does not care what bank the buyer is using. As long as the buyer has the funds and has obtained a prequalification, that is all that matters to them.
Ever here of the saying, "the left hand does not know what the right hand is doing"? Same goes with banks, their departments are separate, lending department vs short sale department, which means that these 2 departments never ever work together in harmony.
At a past transaction where my buyer purchased a Bank of Z foreclosure (Bank of Z is a fictional name of a bank for the purpose of this blog). My clients decided that since they bank with Bank of Z, that it would be best of their interest that they would obtain a loan with Bank of Z during the purchase. Lo and Behold, when it was time to close, Bank of Z has not completed my client's loan approval, which meant, I had to get a closing extension from the listing agent. The listing agent required a letter from the Bank of Z's letterhead that the loan was not ready and the reasons. Well, since Bank of Z was such a large bank, they do not release such letters. But it is your foreclosure department that is requiring this letter. Are you serious? So as you can see, it was a nightmare to try to get the extension. Bank of Z's lending department tried to contact the foreclosure department to let them know what's going on and they could not get hold of anyone.
If you want a smooth non stressful closing, go with a lender of your choice that knows they can close the deal on time and get preapproved! If you are really thinking of going with Bank of Z, seriously reconsider it!
